A real bargain

For those of you who like end-of-financial year bargains, here’s one that’s hard to beat. The Australian government has a scheme under which it matches donations to certain aid projects on a $3 for $1 basis[1].So if you give $500, the matching funds can bring the grant up to $2000 which is enough to buy books for an entire school in a poor country. In addition, the donations themselves are tax deductible, so if you’re one of those groaning under our top marginal tax rate, the effective cost is only $250.

I got the info on this from PLAN, but a lot of other organisations have access to the same scheme. In addition to PLAN, I’ve always found Oxfam/CAA to be pretty impressive, but there is a wide range of worthwhile options.

I found this info on the Ausaid website. In particular, if all the funds allocated to this program aren’t spent by June 30, they’ll go back to consolidated revenue. So if, like me, you think that aid to the world’s poor ought to have a higher priority in the budget, you can get a lot of effective leverage from this program. I assume the program will continue next year, and I don’t know what would happen if an increase in donations used up the budget allocation early in the year, but it couldn’t hurt to try. Maybe the government would be shamed into allocating more money.

fn1. There’s an “up to” in there, which always rings alarm bells when you’re looking at bargains, but it does appear that the full 3:1 amount is available in most cases.

I’ve just donated my tax cut of $1095 for 2004-05 plus extra family tax benefit of $600 to overseas aid (along with the amount I save from it being tax deductible). I didn’t agree with the tax cut so seemed a reasonable thing to do, and it does give a big multiplier.

I am not sure about Oxfam/CAA being impressive. Having been involved with them for many years, I found them very resistant to criticism. For example, year after year, the head of CAA would stand up and state that only countries that followed grass roots/bottom-up development could succeed in raising the living standards of the majority of their population. Year after year, I would raise my hand and ask how then does one explain the success of countries such as Taiwan and Korea. The answer I essentially received was that I should leave CAA and join a more conservative organisation like World Vision. When I put similar points in a draft paper I circulated for comment, I was threatened with legal action, by the then head of ACFOA – the NGO peak body if I published. He especially disliked my comment that NGOs were not very open to criticism. In my experience, Green groups are even more undemocratic.

I have found CAA’s general toleration of anti-globalism pretty hard to take and as a result have taken my patronage elsewhere. Oxfam’s trying to do good by paying coffee growers a ‘fair’ price seems like a pretty lame way to help people effectively. But maybe I’m missing something.

Re Oxfam, I heard one of their reps today on News Radio. He was emphasising that they were trying to promote FAIR trade, and that they were particularly concerned about the position of agriculture in poor countries.

The thrust of the report was to say that trade had value for a developing economy, but was a secondary factor and the opening of an economy needed to be under the control of that nation state, not an externally prescribed cure-all.

Oxfam saw itself as leading a campaign that would bring together the interests of ‘developmentalists’ and ‘free-traders’. However, in the recommendations they tended to privilege trade more than the text of the report would warrant. In the end they pleased neither side, and the World Bank, whose research I (as a non-economist) thought they had intellectually blown out of the water, continued pretty much as before.

I too thought Oxfam’s notion of a world coffee support price was a bit weak. Nevertheless, they have an impressive world-wide network. The fact that they can’t bridge the gap betweem the two paradigms identified by Martin Khor (brief summary here) , the corporatist neoliberal and the democratic developmentalist approaches (my words) is no surprise. A pity, because the intellectual standard of their report was quite high, I thought.

“Unfortunately, no major newspaper or TV news show offered prime space to the UNCTAD (United Nations Conference on Trade and Development) biannual report. This document calls into question the entire “globalization” or “free market” system. Increased international trade, it concludes, has not led to reduction in poverty in the world’s poorest countries. Indeed, during this boom of world trade poverty has increased, as has the income gap between rich and poor.”

“The study found little linkage to show that trade had enlarged the income of the poorest in the world’s 50 least developed countries. UNCTAD officials confirmed that trade had helped integrate some poor countries into the world economy; but their negative trade balances had grown more distressing as a result of the neo-liberal trade policies.”